The company released its 2024 semi-annual report. In the first half of 2024, the company achieved operating income of 4.418 billion yuan, +75.48% year over year; net profit to mother of 0.769 billion yuan, +47.19% year over year; net profit after deducting non-return to mother 0.772 billion yuan, +53.70% year over year. In 2024Q2, the company achieved operating income of 2.453 billion yuan, +65.94% YoY; net profit to mother 0.436 billion yuan, +44.80% YoY; net profit after deducting non-attributable net profit of 0.434 billion yuan, +48.29% YoY. From January to June 2024, the company signed a new order of 6.285 billion yuan (tax included), an increase of 8.74% year-on-year. As of June 30, 2024, the company's on-hand orders were 14.341 billion yuan (tax included), an increase of 41.11% year over year.

The photovoltaic industry is facing phased overcapacity in the short term, and it is expected that the leading market share will increase after the industry clears up. The company is a market segment leader in the photovoltaic equipment industry. The company's main products are photovoltaic equipment such as string welding machines, silicon wafer sorters, screen printing lines, laser-assisted sintering equipment, BC printing equipment, BC printing lines, light injection annealing furnaces, and low oxygen monocrystalline furnaces.

1) String welder: The company began pre-developing 0BB welding technology in 2020, and successfully developed 0BB string welder and XBC string welder in 2023, with a market share of over 60%.

2) Single crystal furnace: In 2023, in order to solve the concentric circles caused by Topcon's silicon wafers due to high oxygen content, the company launched a cost-effective low oxygen monocrystalline furnace, and obtained batch orders from leading customers after launch.

3) Screen printing: The company led the industry to break through the ultra-fast cycle of 0.8 s for the first time (production capacity of 9,000+ pieces/hour), and achieved ultra-high precision printing of 6 microns, compatible with 182-230 sizes.

4) Laser enhanced metallization equipment LEM: At present, this equipment has been verified by several leading customers on the battery side of the TopCon process, and has received batch orders for mass production from TopCon's leading companies. The equipment has an obvious effect on improving battery conversion efficiency, and has become a new standard product for TopCon battery production lines.

6) Silicon wafer sorter: The company promotes product upgrades, from 13,500 tablets/hour upgrade iterations to 18,000 wafers per hour, while also meeting full half-chip compatibility, as well as dual-plug and half-chip compatibility. Currently, the world's major silicon wafer manufacturers such as Longji Green Energy, Gaojing Solar Energy, and Hongyuan Green Energy are all customers of the company's silicon sorters.

Investment advice: Because the photovoltaic industry is currently in a phase of overcapacity, we expect the company's net profit to be 1.64, 2.05, and 2.31 billion yuan in 2024-2026, up 30.5%, 25.3%, and 12.7% year-on-year. The current stock price of the corresponding company PE is 6.4/5.1/4.5X. As a leader in photovoltaic string welding machines, the company will take the lead and benefit deeply from the iteration of 0BB technology. At the same time, silicon wafer & cell products will continue to be enriched, maintaining a “buy” rating.

Risk warning: 0BB technology expansion falls short of expectations, photovoltaic industry production expansion falls short of expectations, and market competition intensifies.